Myelin is a membrane characterized by high lipid content to facilitate impulse propagation. Changes in myelin fatty acid (FA) composition have been associated with peripheral neuropathy, but the specific role of peripheral nerve FA synthesis in myelin formation and function is poorly understood. We have found that mice lacking sterol regulatory element-binding factor-1c (Srebf1c) have blunted peripheral nerve FA synthesis that results in development of peripheral neuropathy. Srebf1c-null mice develop Remak bundle alterations and hypermyelination of small-caliber fibers that impair nerve function. Peripheral nerves lacking Srebf1c show decreased FA synthesis and glycolytic flux, but increased FA catabolism and mitochondrial function. These metabolic alterations are the result of local accumulation of two endogenous peroxisome proliferator-activated receptor-α (Pparα) ligands, 1-palmitoyl-2-oleyl-sn-glycerol-3-phosphatidylcholine and 1-stearoyl-2-oleyl-sn-glycerol-3-phosphatidylcholine. Treatment with a Pparα antagonist rescues the neuropathy of Srebf1c-null mice. These findings reveal the importance of peripheral nerve FA synthesis to sustain myelin structure and function.